why is there more value to a text link ad versus putting the same thing in a directory? do text link ads carry more weight because you're there with only two or three links? Whereas directories have extremely low value because you're there with 500, 800, 1000+ other links?
Yes they carry more weight because the sites ussually has less outbound links and if you choose correctly they are normally very much more on topic. Google has also figured out directory links and give much less value(trust) to them.
It depends, a link from a directory like dmoz or yahoo may be worth a lot more than a text link ad. In addition to that directories have the advantage that offer (at least most of them) permanent links for free or for a one time fee while in most cases text link ads have a reccuring fee. The fact that it is a permanent link not only is better because of the costs involved but because the link will age and a lot of people agree that aged links are valuable. Anyway, a combination of both may be the way to go.